Monday, February 22, 2010

The Real Consequences Of The McCourt Divorce: Higher Ticket Prices

The Dodgers could seek to keep their player payroll below last year's level through 2018 while the average ticket price and club revenue could nearly double, according to confidential financial documents included in a court filing last week.

The documents, submitted by former Dodgers chief executive Jamie McCourt in divorce proceedings against owner Frank McCourt, offer a rare glimpse into the finances of a major league club.

The documents -- prepared by the McCourt management team in May to solicit Chinese investors for a partnership that could have included the Dodgers, a soccer club in Beijing and another in the English Premier League -- show that the Dodgers spent $128 million in player compensation for their 40-man roster in 2007, then spent $123 million in 2008.

They spent $132 million last season, according to figures from the commissioner's office, which included in its accounting deferred payments to Manny Ramirez and Andruw Jones.

The projections show the Dodgers planning to cut it to $107 million this year, with slight annual increases thereafter. In 2018, player compensation is estimated at $125 million.

And you thought Fox was bad. At least Fox had people who knew what baseball even was. Did McCourt think this was gonna be like Treasuries, where the owners would just let him run the team as a general partner?

Over a long period of time, this is not as bad as it sounds, because of the strong possibility of heightened inflation. A doubling of ticket prices might, in fact, even be conservative.

Joshua Fisher at Dodger Divorce notes that Jamie was spending $800,000 annually, some fraction (most?) of which came from the Dodgers; that's almost as much as Matt Kemp and Clayton Kershaw combined ($871,000).